Clarks is facing a liquidity crisis and the fix, for now, will come in the form of staff and store cutbacks.
The U.K. footwear firm said it’s cutting 900 jobs and shuttering an undisclosed number of stores as part of a restructuring strategy aimed at turning the company around.
Nearly 200 jobs have already been cut, and the rest will be wound down over the next 18 months as Clarks works to streamline its operations. At least 200 new jobs are expected to be created in the process, the company noted.
Where stores are concerned, Clarks will be scaling back from its current 1,400 stores in 75 countries, though how many are on the chopping black hasn’t been made clear.
The pandemic has only propelled challenges the footwear firm had already been facing in recent years. In 2005, Clarks moved its production to Asia, which meant facing extra tariffs that came with the U.S. trade dispute with China, and ultimately, limiting liquidity.
And store closures as a result of the pandemic haven’t helped the situation. The company has since started reopening some stores in China and in some European markets, but what’s to become of demand remains to be seen. The U.S. and U.K. are among the countries that have been hardest hit, and Clarks said it is following local governmental guidance on when it can reopen its stores in those markets.
Clarks has seen its footwear sales decline, and in 2019, it posted a loss of more than $106 million. Earlier this month, financial sources said the company was exploring funding options to help shore up some near-term liquidity needs in the wake of COVID-19.